Case 23-1260, Document 92, 12/18/2023, 3598955, Page1 of 42
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`IN THE
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`United States Court of Appeals
`
`FOR THE SECOND CIRCUIT
`
`23-1260
`d
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`
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`HACHETTE BOOK GROUP, INC., HARPERCOLLINS PUBLISHERS L.L.C.,
`JOHN WILEY & SONS, INC., PENGUIN RANDOM HOUSE LLC,
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`—against—
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`INTERNET ARCHIVE,
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`DOES 1-5, INCLUSIVE,
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`Plaintiffs-Appellees,
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`Defendant-Appellant,
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`Defendants.
`
`ON APPEAL FROM THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`BRIEF FOR AMICI CURIAE COPYRIGHT SCHOLARS
`IN SUPPORT OF DEFENDANT-APPELLANT AND REVERSAL
`
`JASON M. SCHULTZ
`SUNOO PARK (admission pending)
`JAKE KARR
`TECHNOLOGY LAW AND POLICY CLINIC
`NEW YORK UNIVERSITY SCHOOL OF LAW
`245 Sullivan Street #609
`New York, New York 10012
`(212) 992-7365
`
`Counsel for Amici Curiae
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`

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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page2 of 42
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`TABLE OF CONTENTS
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`TABLE OF AUTHORITIES................................................................................... iii
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`INTERESTS OF AMICI CURIAE ............................................................................ 1
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`SUMMARY OF ARGUMENT................................................................................. 3
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`ARGUMENT ............................................................................................................ 7
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`I.
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`The purpose and character of CDL heavily favor fair use. ........................ 8
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`A.
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`B.
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`The district court’s broad characterization of commercial
`purpose improperly swept in nonprofit library lending. .................. 8
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`Adapting one-to-one library lending to the digital age facilitates
`access to information, strongly favoring fair use. ......................... 10
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`1.
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`2.
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`Facilitating digital library lending furthers the objectives
`of copyright law, regardless of transformativeness. ............ 11
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`CDL is transformative because it makes books available
`in a more convenient and usable form................................. 14
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`II.
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`The publishers failed to demonstrate CDL caused cognizable market
`harm. ........................................................................................................ 17
`
`A.
`
`B.
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`The district court failed to consider the public benefits of CDL
`and the risk of harm to the public. ................................................. 18
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`CDL has a distinct market niche that does not usurp the market
`for licensed lending ebooks. .......................................................... 25
`
`1.
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`2.
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`Any market harm caused by CDL is not cognizable under
`copyright law. ...................................................................... 25
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`The district court improperly presumed market harm
`based on the mere existence of a secondary market. ........... 28
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page3 of 42
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`3.
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`4.
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`CDL has a distinct audience which separates it from the
`market for licensed ebooks. ................................................. 30
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`The district court failed to consider the possibility of non-
`substituting market effects................................................... 32
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`CONCLUSION ....................................................................................................... 34
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`CERTIFICATE OF COMPLIANCE ...................................................................... 35
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page4 of 42
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`Cases
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`TABLE OF AUTHORITIES
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`Am. Geophysical Union v. Texaco Inc., 60 F.3d 913 (2d Cir. 1994) ........ 4, 9, 26, 29
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`Am. Soc’y for Testing & Materials v. Public.Resource.Org, Inc., 82 F.4th 1262
`(D.C. Cir. 2023) ........................................................................................... 29, 30
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`Am. Soc’y for Testing & Materials v. Public.Resource.Org, Inc., 896 F.3d 437
`(D.C. Cir. 2018) ........................................................................................... 10, 14
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`Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 11 F.4th 26
`(2d Cir. 2021) ............................................................................................... 29, 32
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`Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015)................. 10, 14, 15, 16
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`Authors Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014) ......................... 11, 20
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`Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006) .... 25
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`Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908) ........................................ 6, 12, 27
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`Cambridge Univ. Press v. Patton, 769 F.3d 1232 (11th Cir. 2014) .................. 26, 29
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`Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) ............................... 28, 29
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`Capitol Records, LLC v. ReDigi Inc., 910 F.3d 649 (2d Cir. 2018).................. 16, 17
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`Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013) ......................................................... 6
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`Diversey v. Schmidly, 738 F.3d 1196 (10th Cir. 2013) ............................................. 8
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`Doan v. Am. Book Co., 105 F. 772 (7th Cir. 1901) ................................................. 12
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`Fox News Network, LLC v. TVEyes, Inc., 883 F.3d 169 (2d Cir. 2018) ................. 15
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`Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183 (2021) ....................... 6, 18, 22, 33
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page5 of 42
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`Hachette Book Grp., Inc. v. Internet Archive, No. 20-CV-4160, 2023 WL
`2623787 (S.D.N.Y. Mar. 24, 2023) .............................................................passim
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`Harper & Row, Publishers, Inc. v. Nation Enter., 471 U.S. 539 (1985) ................ 18
`
`Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013) ............................passim
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`Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417
`(1984) ..................................................................................................... 15, 16, 29
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`Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 756 F.3d 73
`(2d Cir. 2014) ......................................................................................... 10, 11, 32
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`Twentieth Century Music Corp. v. Aiken, 422 U.S. 151 (1975) .............................. 27
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`Ty, Inc. v. Publ’ns Int’l Ltd., 292 F.3d 512 (7th Cir. 2002) .............................. 29, 33
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`United States v. Paramount Pictures, 334 U.S. 131 (1948) .................................... 19
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`Williams & Wilkins Co. v. United States, 487 F.2d 1345 (U.S. Ct. Cl. 1973) .... 8, 32
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`Statutes
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`17 U.S.C. § 107 ......................................................................................................... 8
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`17 U.S.C. § 108 ....................................................................................................... 20
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`17 U.S.C. § 109 ................................................................................................. 12, 16
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`17 U.S.C. § 121 ................................................................................................. 13, 22
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`42 U.S.C. § 12101 ............................................................................................. 13, 22
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`Other Authorities
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`Aaron Perzanowski & Jason Schultz, Copyright Exhaustion and the Personal
`Use Dilemma, 96 Minn. L. Rev. 2067 (2012) .................................................... 26
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page6 of 42
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`Abhishek Nagaraj & Imke Reimers, Digitization and the Market for Physical
`Works: Evidence from the Google Books Project, 15 Amer. Econ. J. 428
`(2023) ........................................................................................................... 20, 33
`
`Am. Libr. Ass’n, Competition in Digital Markets 2 (2019) .................................... 23
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`Amy Nowakowsky & Kat Voy, The Ebook Pricing War: The Fight for Control
`Between Libraries and Publishers, Open Educ. Alberta (2023) ........................ 33
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`Anthony Aycock, Unauthorized Practice of Law in the Library, Am. Librs.
`(Nov. 6, 2019) .................................................................................................... 19
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`Ben Ellery & James Beal, Roald Dahl ebooks ‘Force Censored Versions on
`Readers’ Despite Backlash, Times (Feb. 25, 2023) ........................................... 31
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`Blake Reid, Copyright and Disability, 109 Calif. L. Rev. 2173 (2021).................. 21
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`Bos. Libr. Consortium CDL Working Grp., Consortial CDL: Implementing
`Controlled Digital Lending as a Mechanism for Interlibrary Loan (2021) . 21, 31
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`Claire Woodcock, Publishing Company Starts School Year by Removing over
`1,000 E-Textbooks, Vice (Oct. 5, 2022) ....................................................... 24, 31
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`Daniel A. Gross, The Surprisingly Big Business of Library E-books, New
`Yorker (Sept. 2, 2021) .................................................................................. 24, 31
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`Elizabeth F. Emens, Disability Admin: The Invisible Costs of Being Disabled,
`105 Minn. L. Rev. 2329 (2021) .......................................................................... 22
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`Ericka McIntyre, For the Love of Libraries: Four Authors on What Makes
`Libraries Wonderful, Writer’s Dig. (Sep. 23, 2019) .......................................... 19
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`Erin M. Watson, A Comparative Study of Medical ebook and Print Book Prices,
`38 Health Info. & Librs. J. 39 (2021) ................................................................. 33
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`Geoffrey A. Fowler, Want to Borrow That e-book from the Library? Sorry,
`Amazon Won’t Let You., Wash. Post (Mar. 12, 2021) ....................................... 23
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`H.R. Rep. 94-1476 (1976) ................................................................................... 9, 12
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page7 of 42
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`Jeanne C. Fromer, Should the Law Care Why Intellectual Property Rights Have
`Been Asserted?, 32 Hous. L. Rev. 549 (2016) ................................................... 27
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`Jonathan Band, The Impact of Substantial Compliance with Copyright
`Exceptions on Fair Use, 59 J. Copyright Soc’y U.S.A. 453 (2012) .................. 13
`
`Katherine Klosek, US Copyright Office Allows Access to E-books for People
`with Disabilities, but Licenses May Still Restrict Access, Ass’n Rsch. Librs.
`(Jan 18, 2022) ..................................................................................................... 21
`
`Matt Enis, Macmillan Announces Two-Month Embargo on Library Ebooks,
`Libr. J. (Jun. 25, 2019) ......................................................................................... 7
`
`Michelle M. Wu, The Corruption of Copyright and Returning It to Its Original
`Purposes, 40 Legal Reference Servs. Q. 113 (2021) ......................................... 23
`
`Moya Dillon, ‘It Comes Down to Price Gouging’: Brock Library Call for
`Equity on ebooks, Durhamregion.com (Apr. 13, 2022) ..................................... 24
`
`Nathan Mealey et al., The Library Technology Market’s Failure to Support
`Controlled Digital Lending, Scholarly Kitchen (Oct. 25, 2021) ........................ 31
`
`Nikki Davidson, Behind E-Books, Libraries Find Restrictions and High Costs,
`Gov’t Tech. (Jun. 15, 2023) ................................................................................. 7
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`Reggie Ugwu, It’s Their Content, You’re Just Licensing It, N.Y. Times
`(Apr. 4, 2023) ....................................................................................................... 7
`
`Sarah Lamdan et al., The Anti-Ownership Ebook Economy, Engelberg Ctr. on
`Innovation L. & Pol’y (2023) ....................................................................... 27, 30
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`Xiyin Tang, Privatizing Copyright, 121 Mich. L. Rev. 753 (2023) ........................ 24
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page8 of 42
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`INTERESTS OF AMICI CURIAE1
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`Amici are the following eleven copyright scholars who bring their combined
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`expertise to bear on the important fair use issues raised by this case. As copyright
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`scholars and practitioners, amici have a significant interest in aiding the Court’s
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`consideration of this case.2
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`Jonathan Askin, Professor of Clinical Law, Brooklyn Law School; Founder
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`and Director, Brooklyn Law Incubator & Policy Clinic; Faculty Chair and
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`Innovation Catalyst, Brooklyn Law Center for Urban Business Entrepreneurship;
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`Founder and Director, Justice Lab.
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`Patricia Aufderheide, University Professor of Communication Studies,
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`School of Communication, American University; Founder and Senior Research
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`Fellow, Center for Media & Social Impact, American University.
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` 1
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` All parties have consented to the filing of this brief. Fed. R. App. P. 29(a)(2).
`No counsel for any party authored this brief in whole or in part, and no person
`other than amici or their counsel contributed money intended to fund the
`preparation or submission of this brief. Fed. R. App. P. 29(a)(4)(E).
`2 Amici would like to thank law students in NYU’s Technology Law and Policy
`Clinic, including Justin Jin, for their significant contributions to this brief.
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page9 of 42
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`Dr Patrick Goold, Reader in Law, The City Law School, University of
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`London.
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`Stacey M. Lantagne, Professor of Law, Western New England University
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`School of Law.
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`Sari Mazzurco, Assistant Professor of Law, Southern Methodist University
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`Dedman School of Law.
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`Sunoo Park, Assistant Professor, Computer Science, New York University
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`Courant Institute of Mathematical Sciences; Affiliated Interdisciplinary Faculty,
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`NYU School of Law.
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`Aaron Perzanowski, Thomas W. Lacchia Professor of Law, University of
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`Michigan Law School.
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`Blake E. Reid, Associate Professor of Law, University of Colorado Law
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`School; Faculty Director, Telecom and Platforms Initiative at the Silicon Flatirons
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`Center.
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`Jason Schultz, Professor of Clinical Law, New York University School of
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`Law; Director, NYU Technology Law & Policy Clinic; Co-Director, Engelberg
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`Center on Innovation Law & Policy.
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page10 of 42
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`Pamela Samuelson, Richard M. Sherman Distinguished Professor of Law,
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`University of California at Berkeley; Co-Director, Berkeley Center for Law &
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`Technology.
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`Jessica Silbey, Professor of Law and Yanakakis Faculty Research Scholar,
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`Boston University School of Law; Affiliate Fellow, Information Society Project,
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`Yale Law School; Affiliate Faculty, Center for Innovation in Social Sciences,
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`Boston University.
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`SUMMARY OF ARGUMENT
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` Anywhere in this country, you can walk into a public library and browse a
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`large collection of books. You can even check one out to enjoy at home. Libraries
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`have always been free under copyright law to lend materials they own as they see
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`fit. This is a feature of copyright law, not a bug. The principles of copyright
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`exhaustion and fair use, designed to maintain the balance between incentives to
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`create and public access to knowledge, protect the important social benefits that
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`libraries provide.
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`As our lives have moved online, libraries have adopted new technologies to
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`help them lend their collections to patrons. But publishers insist that the shift to
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`digital allows them to control how libraries lend out the books they own—a right
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`copyright law has never provided before. The major publishers refuse to sell digital
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page11 of 42
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`books to libraries, forcing them to settle for restrictive licenses of digital content
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`rather than genuine ownership. Moreover, publishers insist they can prevent
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`libraries from scanning their lawfully purchased physical books and lending the
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`resulting digital copies. In agreeing with this position, the district court took a
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`dangerously narrow view of the fair use doctrine and undermined copyright law’s
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`longstanding protection of library lending.
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`Under the first factor, the district court ignored the long history of nonprofit
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`library lending when it deemed Internet Archive’s activities “commercial.”
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`Controlled Digital Lending (CDL) digitizes the centuries-old practice of lending
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`books for no fee that courts and Congress have long considered a quintessential
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`nonprofit use. The district court’s overemphasis on fundraising and promotion—
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`essential activities for any nonprofit organization—“lead[s] to an overly restrictive
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`view of fair use.” Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 921 (2d Cir.
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`1994) (clarifying that “commercial use” means a “direct or immediate commercial
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`advantage” from copying, not mere attenuated benefits).
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`In addition, CDL’s purpose and character align with the overall goals of
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`copyright law and expand the utility of works in a transformative manner. CDL is
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`premised on each library owning a physical copy of a book as a condition for
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`offering to lend it out in digital form. Courts have long recognized the vital
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page12 of 42
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`function libraries serve when they lend their collections to patrons, one copy at a
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`time. See Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519, 540 (2013)
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`(discussing library lending as furthering constitutional copyright objectives).
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`Historically, library lending has been protected by copyright exhaustion—often
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`called the “first sale” doctrine—in part because it furthers broad public access to
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`information through secondary markets, from used book stores and estate sales to
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`the library lending at issue here. Though CDL does not fit squarely within the
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`statutory definition of the first sale rule, the same rationale supports a finding that
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`the practice is fair use. Similarly, CDL makes it easier for institutions to meet their
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`accessibility obligations to patrons with disabilities, an interest Congress
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`recognizes as important to copyright law. By bolstering the accessibility and
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`convenience of libraries’ lawfully owned physical collections, CDL also improves
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`the efficiency of content delivery in a way this Circuit has regularly recognized as
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`transformative.
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`The district court also erred in its analysis of the fourth factor by neglecting
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`to consider several long-standing public benefits of digital lending, including
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`promoting access to knowledge and facilitating accessibility improvements. These
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`public benefits of CDL are central to copyright law and far outweigh the profits
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`publishers allegedly gain from squeezing library budgets. It additionally failed to
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page13 of 42
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`consider the harmful transaction costs that publishers impose on libraries and the
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`broader public when digital lending is outlawed. See Google LLC v. Oracle Am.,
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`Inc., 141 S. Ct. 1183, 1208 (2021).
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`Finally, the district court misunderstood the analysis of market effects. It
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`accepted publishers’ conclusory market definition and assertions of harm, but
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`failed to consider the nature of those effects, the proper scope of the market, and
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`copyright’s inherent limitations on relevant market harm. When alleged harms
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`stem from secondary markets like lending and resale, copyright recognizes them as
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`necessary parts of its constitutional mandate, see Kirtsaeng, 568 U.S. at 540–41,
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`and rejects rightsholders’ attempts to assert control over them, see, e.g., Bobbs-
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`Merrill Co. v. Straus, 210 U.S. 339, 350 (1908). What’s more, despite distinct
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`audiences for CDL and licensed lending ebooks, the district court lumped them
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`together into a single market, greatly overstating the degree of market harm rights
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`holders might encounter. See Cariou v. Prince, 714 F.3d 694, 709 (2d Cir. 2013)
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`(finding no market harm because the two artists appealed to different audiences).
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`The district court’s decision threatens libraries’ continued survival in the
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`digital age. Even as ebook lending grows, publishers place a wide range of works
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`beyond the reach of libraries.3 They embargo new releases, and in some cases,
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`have flatly refused to license titles to libraries.4 Unless reversed, the decision below
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`will allow publishers to lock down library lending and cut off the easy, free access
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`to a wide range of works that libraries have provided for centuries. This Circuit has
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`the opportunity to reaffirm library lending as a quintessential fair use and protect
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`the critical role libraries play in communities across the country.
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`ARGUMENT
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`The use of CDL by nonprofit libraries is a socially beneficial activity fair use
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`should protect. The district court erred in its analysis of the first and fourth fair use
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`factors. Under the first factor, the opinion below failed to weigh the nonprofit
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`educational nature of CDL in favor of defendants. It also overlooked how CDL
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`expands both access to information and the utility of books in a transformative
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` 3
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` Nikki Davidson, Behind E-Books, Libraries Find Restrictions and High Costs,
`Gov’t Tech. (Jun. 15, 2023), https://www.govtech.com/biz/data/behind-e-books-
`libraries-find-restrictions-and-high-costs.
`4 Id.; Matt Enis, Macmillan Announces Two-Month Embargo on Library Ebooks,
`Libr. J. (Jun. 25, 2019), https://www.libraryjournal.com/story/macmillan-
`announces-two-month-embargo-on-library-ebooks; Reggie Ugwu, It’s Their
`Content, You’re Just Licensing It, N.Y. Times (Apr. 4, 2023),
`https://www.nytimes.com/2023/04/04/arts/dahl-christie-stine-kindle-edited.html.
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page15 of 42
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`manner. When analyzing the fourth factor, the district court improperly ignored the
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`public benefits of CDL, omitting consideration of libraries’ access-expanding
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`mission and the accessibility improvements CDL makes possible. The court further
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`misunderstood the market effects analysis, applying an effective presumption of
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`market harm without inquiring into the nature of the market, the actual effects of
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`CDL, and the limits of cognizable harm.
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`I.
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`The purpose and character of CDL heavily favor fair use.
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`A. The district court’s broad characterization of commercial
`purpose improperly swept in nonprofit library lending.
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`Library use of CDL is a non-commercial activity that weighs in favor of fair
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`use. The first factor values uses that serve “nonprofit educational purposes” over
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`those of a “commercial nature.” 17 U.S.C. § 107(1). Courts have long held that
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`library activities designed to facilitate public access to information have a
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`nonprofit purpose privileged by this statutory language. See, e.g., Williams &
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`Wilkins Co. v. United States, 487 F.2d 1345, 1354 (U.S. Ct. Cl. 1973) (holding that
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`medical libraries “devoted . . . to the advancement and dissemination” of
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`information could photocopy articles for that purpose under fair use), aff’d, 420
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`U.S. 376 (1975); Diversey v. Schmidly, 738 F.3d 1196, 1203 (10th Cir. 2013)
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`(finding that distributing a dissertation within a university library was a “non-
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page16 of 42
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`commercial, educational purpose at the heart of the protection for fair use”); see
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`also H.R. Rep. 94-1476, at 74 (1976) (“[T]he doctrine of fair use applies to library
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`photocopying.”). By lending digital books to members of their communities for no
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`fee, libraries employing CDL uphold this nonprofit tradition.
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`Libraries, like all institutions, need resources to fulfill their missions. The
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`district court’s conception of commercial use, however, punished nonprofit
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`organizations for engaging in standard fundraising and publicity necessary to
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`further their socially beneficial activities. The decision below acknowledged
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`defendant-appellant Internet Archive was a nonprofit that did not charge patrons to
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`borrow books, but insisted regardless that IA “profited” from digital lending
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`because it “uses its Website to attract new members, solicit donations, and bolster
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`its standing in the library community.” Hachette Book Grp., Inc. v. Internet
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`Archive, No. 20-CV-4160, 2023 WL 2623787, at *9 (S.D.N.Y. Mar. 24, 2023).
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`Such superficial analysis contradicts this Circuit’s nuanced understanding of
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`commercialism, which requires that courts “differentiat[e] between a direct
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`commercial use and [a] more indirect relation to commercial activity.” Am.
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`Geophysical Union, 60 F.3d at 921. It is not enough to show that a defendant
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`receives monetary or other benefits in the normal course of business; there must be
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`a “direct or immediate commercial advantage” from use of copyrighted material.
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page17 of 42
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`Id.; see also Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 756 F.3d 73, 83 (2d
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`Cir. 2014) (refusing to weigh commercial motivations where the challenged
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`copying was “one small part” of a “multifaceted research service”); Am. Soc’y for
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`Testing & Materials v. Public.Resource.Org, Inc., 896 F.3d 437, 449 (D.C. Cir.
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`2018) (rejecting contention that nonprofit’s copying was commercial because it
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`was “part of [the organization’s] fundraising appeal”). When libraries charge no
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`fee for lending, and in fact incur costs by providing that service, their use is
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`noncommercial under the first factor.
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`B. Adapting one-to-one library lending to the digital age facilitates
`access to information, strongly favoring fair use.
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`The purpose and character of CDL is to broaden access to knowledge. Fair
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`use is designed to help courts determine “how to define the boundary limit of the
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`original author’s exclusive rights in order to best serve the overall objectives of the
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`copyright law to expand public learning while protecting the incentives of authors
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`to create for the public good.” Authors Guild v. Google, Inc., 804 F.3d 202, 213
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`(2d Cir. 2015). To that end, the district court failed to adequately weigh CDL’s
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`contributions to the overall public good. Indeed, CDL’s purpose and character
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`favor fair use in two ways: (1) by facilitating library lending, a function that
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`copyright has always recognized as vital; and (2) by expanding the utility of a
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page18 of 42
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`physical book owned by the library, a use that is transformative under the
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`reasoning of this Circuit’s prior decisions.
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`1.
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`Facilitating digital library lending furthers the objectives of
`copyright law, regardless of transformativeness.
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`The district court dismissed CDL under the first factor, stating there is
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`“nothing transformative” about the practice. Hachette, 2023 WL 2623787, at *6.
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`As this Circuit has held, transformation is not the exclusive test under the first
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`factor. See Swatch Grp., 756 F.3d at 84. Indeed, the range of purposes supporting
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`fair use is broad: A transformative use such as scanning books to enable full text
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`search qualifies, as does the non-transformative purpose of making content
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`available to print-disabled readers. Authors Guild, Inc. v. HathiTrust, 755 F.3d 87,
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`101 (2d Cir. 2014). Publishing the entire recording of an earnings call was found to
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`serve an “important public purpose” because it delivered newsworthy information,
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`“regardless of how transformative” the use was. Swatch Grp., 756 F.3d at 85, 92.
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`What matters is how secondary uses further the overall goals of copyright.
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`CDL furthers a goal that copyright has long recognized as vital: lending
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`library books to ensure the public benefits from the knowledge and creativity
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`contained within. Naturally, fair use cases dealing with library lending are rare,
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`since the practice of loaning physical books is protected by first sale. See 17 U.S.C.
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page19 of 42
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`§ 109; Kirtsaeng, 568 U.S. at 540 (warning that allowing rightsholder-imposed
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`constraints on library lending would “fail to further . . . the Progress of Science and
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`useful Arts” (quoting U.S. Const. art. I, § 8, cl. 8)); Bobbs-Merrill, 210 U.S. at 350;
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`Doan v. Am. Book Co., 105 F. 772, 777 (7th Cir. 1901) (holding that first sale
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`permits an owner to reproduce aspects of a book in order to “render [it]
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`serviceable” for future distribution); H.R. Rep. No. 94-1476, at 79 (confirming the
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`first sale provision in § 109 ensures that “[a] library that has acquired ownership of
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`a copy is entitled to lend it under any conditions it chooses to impose”). However,
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`there is plenty of evidence indicating that one-to-one digital lending, even if
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`outside the statutory scope of § 109, should be considered fair use.
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`CDL updates the long-accepted practice of library lending for the modern
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`reality of digital distribution. When libraries practice CDL, they begin, just as they
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`do when they physically lend a book, with a physical copy they own. Libraries
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`maintain a strict one-to-one ratio of physical books owned to digital copies loaned,
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`ensuring a first sale has already occurred (the copy owned) for each digital copy
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`checked out by a patron (the copy loaned). Instead of examining whether the
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`purpose and character of CDL were similar to physical lending, the district court
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`instead cast aside the principle of first sale as having no bearing on the fair use
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`analysis. Hachette, 2023 WL 2623787, at *10–11. But where Congress has
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page20 of 42
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`recognized a public policy interest by implementing a specific exemption to
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`copyright law—namely, § 109’s rationale of expanding public access to works—
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`courts too should recognize that interest as weighing in favor of fair use doctrine
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`under the first factor. See Jonathan Band, The Impact of Substantial Compliance
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`with Copyright Exceptions on Fair Use, 59 J. Copyright Soc’y U.S. 453, 458–61
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`(2012). Congress’s endorsement of copyright exhaustion, especially in the context
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`of library lending, provides strong evidence in favor of fair use—evidence that the
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`district court ignored.
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`CDL also promotes another important goal of copyright law by making it
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`easier for libraries to meet their accessibility obligations to disabled readers. See
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`infra Section II.A (describing how digitized books can help readers with vision
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`impairment, dyslexia, and other disabilities access content). As this Circuit has
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`noted, Congress has expressed an intent “that copyright law make appropriate
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`accommodations for the blind and print disabled,” and purposes which further that
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`intent weigh in favor of fair use. HathiTrust, 755 F.3d at 102 (citing 17 U.S.C. §
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`121). The district court insisted that CDL’s public availability negates its potential
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`benefits to disabled readers, but this restrictive view is inconsistent with
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`Congress’s strong priority of “ameliorating the hardships” faced by all disabled
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`people. Id. (discussing the Americans with Disabilities Act, 42 U.S.C. § 12101).
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`Case 23-1260, Document 92, 12/18/2023, 3598955, Page21 of 42
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`2.
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`CDL is transformative because it makes books available in
`a more convenient and usable form.
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`Because of its narrow focus on altered content, the district court failed to
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`sufficiently consider other well-established ways in which CDL could be
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`transformative. A use can have a transformative purpose even if it reproduces the
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`work verbatim if it adds value or functionality that serves copyright law’s
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`objectives. See, e.g., Swatch Grp., 756 F.3d at 84 (“[A] secondary work ‘can be
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`transformative in function or purpose without altering or actually adding to the
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`original work.’” (quoting A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d
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`630, 639 (4th Cir. 2009))); Public.Resource.Org, 896 F.3d at 450 (admonishing
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`lower court for inadequately considering whether “distributing copies of the law
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`for purposes of facilitating public access could constitute transformative use”);
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`Google, 804 F.3d at 216–17 (holding that digitizing entire books to enable full text
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`search constituted a “highly transformative purpose”). Specifically, CDL fulfills
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`the transformative purpose of expanding the utility of libraries’ physical
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`collections by making them more easily accessible to all patrons.
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`Courts, including this Circuit, have consistently recognized a purpose and
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`character favoring fair use where the defendant “utilizes technology to achieve the
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`transf